The Connecticut Department of Economic and Community Development recently announced the Employer Student Loan Repayment Tax Credit as an incentive for businesses to assist their employees in paying down their student loans.
The program comes after President Biden’s student loan repayment program was struck down in the United States Supreme Court.
Details on the credit
The tax credit is available to employers that make payments on behalf of their employees with Connecticut Higher Education Supplemental Loan Authority (CHESLA) loans and:
- Credits are worth up to $2,625 per employee.
- The credit is refundable for businesses with less than $5 million in gross receipts in a certain year.
- Employees must be a resident of Connecticut, be employed full time and have received their bachelor’s degree within the last five years.
- Employees cannot be an owner, member or partner of a qualified employer OR a family member of an owner, member or partner of a qualified employer.
CHESLA and the Rhode Island Student Loan Authority (RISLA), both nonprofit state authorities that help students and families finance the cost of higher education, have provided access to a webinar with more details on how the credit works.
Qualified employees that have loans outside of CHESLA are able to refinance their loans. Eligible employers can determine their contribution and frequency of payments, and the program comes at no cost to the employers besides a recurring $4 transaction fee.
More information on the credit and access to the required forms can be found on Connecticut Department of Revenue Services’ website.
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